Question

A retail tenant signs a variable scale percentage lease that sets the monthly rental rate at 5% of gross sales up to $20,000 per month and 2% of gross sales from 20,000 to 50,000 per month. All sales above $50,000 per month have no allotment towards rent. How much does the tenant pay for the first quarter rent if January sales were $28,000, February sales were $15,000 and March sales were $65,000?

A) 2,910.00

B) 3,510.00

C) 2,760.00

D) 3,810.00

Answer 1

Given

Sales	Monthly Rates
Upto 20,000$	5%
20,000$ to 50,000$	2%
Above 50,000	0%

January Month Sales = 28,000$

Up to 20,000$ it is 5% of gross sales = 5% on 20000 = 1,000$

from 20,000 to 50000 it is 2% that is 2% of 8000(28000-20000) = 160$

Total rent = 1000+160 = 1,160$

February Month Sales = 15,000$

Up to 20,000$ it is 5% of gross sales = 5% on 15000 = 750$

Total Rent = 750$

March Month Sales = 65,000$

Up to 20,000$ it is 5% of gross sales = 5% on 20000 = 1,000$

from 20,000 to 50000 it is 2% that is 2% of 30000(50000-20000) = 600$

Above 50,000$ it is Zero

Total Rent = 1000+600 + 0 = 1,600$

Total rent collected in these three months = 1160+750+1600 = 3,510$

Hence option B is the correct answer.